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Last week, digital health accelerator Rock Health unveiled its new offices, and from the news coverage, it seems as if it’s creating an image as much as incubating startup companies.

According to Xconomy, “a big crowd of investors, executives, and other life science industry insiders took time away from JP Morgan to attend the grand opening of Rock Health’s stylish new headquarters in the Mission Bay neighborhood of San Francisco.” And stylish it is.

“Rock Health’s kitchen and community gathering space includes a Cirque-du-Soleil-style swing,” Xconomy reported. Because, you know, incubating companies that will fix a broken $2.8 trillion industry with their “solutions” requires a little avant-garde spectacle à la Québécoise — or perhaps Las Vegas. Having been at the Digital Health Summit at International CES in Sin City myself a week earlier, I was happy to see more focus on substance than style in the meeting room, if not in the exhibit hall.

I bet that swing cost a lot of money. So did the design, since Xconomy saw fit to identify the architecture firm. (For that matter, so did I, but only to give proper credit for the photo.) In an industry where a third or more of spending is wasteful — completely irrelevant to care and probably preventable — according to a 2012 report in Health Affairs, are such frills really necessary? I’m certainly not blaming Rock Health here. It’s the investors who are throwing away their money.

In opening the center, Rock Health reportedly dubbed Mission Bay the ‘United States’ New Digital Health Hub.'” That’s a bold statement. There certainly is a lot of potential there, but, as the person who identified San Diego as “a leader in mobile healthcare” back in January 2010, I still see more substance and tangible results in Southern California than in Northern California. For that matter, the Boston area could make a strong case, as could New York City. Smaller but healthy communities have popped up in places like Madison, Wis. That’s fine, competition is good.

However, I’ve seen more failures in Silicon Valley than anywhere else. But does that stop Silicon Valley’s No. 1 media cheerleader, TechCrunch, from declaring, “VC’s Investing To Heal U.S. Healthcare”? No, it does not.

No flame-out has been as spectacular as that overhyped vaporware known as Google Health. Google is back at it again with its VC arm, but this time the Internet giant seems to have a direction and a clue. Maybe.

As TechCrunch reported, “Google Ventures is addressing the nation’s healthcare dilemma with investments in companies like the physicians’ office and network One Medical Group, which raised a later stage $30 million last March. At the opposite end of the spectrum in December 2013 Google invested in the $3 million seed financing of Doctor on Demand, which sells a service enabling users to video chat with doctors.”

Google appears to be scrapping the torturous direct-to-consumer route in favor of going where the money actually is, from third-party payers and from providers, newly incented under the Patient Protection and Affordable Care Act and private reform efforts to work more efficiently and better coordinate care.

On the other hand, it’s been less than two weeks since Stephen Colbert made fun of Doctor on Demand. (Health 2.0 boss Matthew Holt commented on that post that it was “Kind of unfair that Doctor on Demand get the publicity when American Well and a [scad] of others have been doing this at scale for years.” He was right, but, hey, Google.)

Google Venture General Partner Dr. Krishna Yeshwant told TechCrunch the real motive behind all the VC money flooding into healthcare. “As an entity it is where we’re spending 17 percent to 18 percent of GDP, so any one segment is tens of billions of dollars,” Yeshwant is quoted as saying. “Increasingly you’re seeing IT investors who have a fine sense of disruptive opportunities enter the market.” In other words, it’s all about the Benjamins.

But do they understand that healthcare doesn’t work like any other industry? I’m not so sure. And I haven’t even addressed the bigger questions of privacy, data stewardship, interoperability and workflow.

As you prepare your hate mail for me, check out this site, “What the F*** Is My Wearable Strategy?” (NSFW). Refresh the page for more hilarity, but be forewarned: some of the ideas may hit close to home.

“”The thing that is missing is getting the people with the domain expertise aligned with the people with technological know-how to turn ideas into branded services,” Sculley said, as I report in InformationWeek Healthcare and in tomorrow’s MobiHealthNews.

After raking Rock Health over the coals in my commentary last summer, I offered qualified praise to the San Francisco-based investor/business accelerator for healthcare start-ups last month on this blog. “I was pleasantly surprised to see that the majority of the 15 companies are aimed at either healthcare providers—an important constituency largely missing from the first Rock Health class—and on treatment of truly sick patients.” I wrote.

“I never thought I would say this, at least not before the end of 2011, but kudos to Rock Health for making a real effort to figure out the complex healthcare industry and to add some substance to what heretofore had been all style.”

Tomorrow, I am planning on attending the kickoff event for Healthbox, a similar healthcare business accelerator that differs from Rock Health in at least one key way: it is not in Silicon Valley, but right here in down-to-earth Chicago. Does that make a difference? Well, the kickoff isn’t at a hotel ballroom or Healthbox’s office, it’s in an artsy space called the Ivy Room, in the heart of River North, an area usually populated by more tourists than locals.

I sure hope I’m not in for an over-the-top extravaganza that will highlight cool, direct-to-consumer apps with a snowball’s chance of catching on with the entities that actually pay the bills for healthcare. I want to believe there’s something real here, which is why I’m giving up at least a couple hours of my time to see the presentations. Please tell me that Chicago isn’t becoming a Silicon Valley clone, but rather the hub of health IT innovation it could be.

My first impression of healthcare startup incubator/accelerator Rock Health was not a favorable one. I wrote in MobiHealthNews last July that the San Francisco-based organization founded by some hotshot, young Harvard MBAs demonstrated “yet another example of Silicon Valley arrogance.” I said that Rock Health was mostly targeting the young end of the market with cool, fitness-oriented apps, not the elderly and chronically ill who account for the bulk of the nation’s $2.5 trillion annual healthcare spend. That group wants things that are easy to use rather than fun and hip.

Needless to say, I was not invited to Rock Health’s Christmas party. I did share a quick “hello” nod with Managing Director Halle Tecco when I saw her in a meeting room at the mHealth Summit last month, though.

Even then, I wondered if Rock Health had changed its attitude at all, seeing that even the executives were outfitted in company t-shirts in the buttoned-down world of (just outside) Washington, D.C. (I once had a Capitol Hill press pass early in my career. The rules require members of the media to conform to the same dress code as members of Congress. That means a coat and tie for men, while women have to have jackets if they choose to wear slacks. An unwritten rule of D.C. in general calls for women to wear stockings if they go with a skirt, even if it’s 95 degrees and humid, which it frequently is in the summer.)

Today, though, I saw a clear sign that Rock Health is starting to learn from its earlier mistakes. MobiHealthNews reported on the incubator’s class of 2012, and I was pleasantly surprised to see that the majority of the 15 companies are aimed at either healthcare providers—an important constituency largely missing from the first Rock Health class—and on treatment of truly sick patients. One startup, for example, helps people being treated for breast cancer prepare for doctor visits, while another produces an EHR for home-health agencies. Good stuff in my critical eyes, though really, enough with the social networking to get people to exercise. There are too many of these platforms and apps already.

I never thought I would say this, at least not before the end of 2011, but kudos to Rock Health for making a real effort to figure out the complex healthcare industry and to add some substance to what heretofore had been all style.

I’ve always been conflicted about this conference, and about the whole health 2.0 movement. In some ways, it represents the cutting edge of health IT thinking and consumer engagement. In other ways, it represents Bubble 2.0, with lots of interesting ideas that won’t catch on with the public and/or the healthcare community, as well as companies with no readily evident revenue model. (You know how I feel about style vs. substance.) But the positives generally outweigh the negatives.

Today, there were some pre-conference sessions. The one for doctors seemed like a dog-and-pony show, where various vendors paraded their products in front of an audience. This was my only real astute observation, as posted on Twitter:

It sounded like the Patients 2.0 session was more compelling. Check this Twitter search for more details. Engaging patients is a great idea, but my personal feeling is that the session may have been a little heavy on the kumbaya. To wit:

This post is a little heavy on the Twitter for a reason. I expect to be tweeting a lot more than blogging the next two days, mostly due to time constraints. Check out my Twitter feed on the right side of this page, or just go here.

I definitely ruffled a few feathers with my commentary last month in MobiHealthNews about the arrogance of Silicon Valley when it comes to healthcare and health IT. More importantly, I seem to have provoked exactly the kind of discussion I had hoped for, most notably in the Wireless Health group on LinkedIn. (It’s an open group, so please join if you haven’t already).

“Whatever the opinion on how Neil chose to wrote the piece he does appear to have started a real conversation. And that my friends is one thing that’s been missing for years. If I had to pick one thing to contribute as someone who’s been at it for over a decade it’s to reiterate there has been a lot of wasted investment due to ego and/or naiveté regardless of where the money or developers come from.”

“What gets my hackles up is to see good companies, with proven products/services and customers, with reasonably sound management, struggle and beg for serious money financing to break through, and can’t get it. You and I have been up close and personal on that! VCs want to get in, get out with bucks and are driven by their investors. You cannot count on staying power and confidence there, and that’s not their purpose–but the lines between VC and private equity (the traditional next stage) have become a blur. On the other hand, there has been so much money thrown at half-baked technologies, or mismanaged by companies themselves, it gets me ill. It is all just slightly unhinged from reality–and why the heck we’re pursuing this in the first place.”

“What’s ‘sexy’ are apps that use the iPhone (or other smart phone). Not sure that any of these apps, by themselves, will create the market “buzz” that get’s investors excited. The next Groupon or Zillow….
“Washington can write guidelines and set policies, even implement laws, but the problem is fundamental: Physicians need reasons (incentives and proof of efficacy) to recommend and use apps. A big part of this is basic…we need to focus on meeting the needs of the healthcare consumer. “

“The issue is not whether Silicon Valley gets it, but whether technology alone will solve the problem. I think we all agree that it won’t, so we need collaboration between technologists and healthcare professionals, and the patient (or consumer if you are younger than me) to solve the problem.
“Neil’s willingness to demonstrate that the Technology Emperor really isn’t wearing any clothes is critical for us to start having the real discussion of how the three groups collaborate to form a solution

“Having followed in the industry and VC community for decades the problem is that not every problem can be solved in isolated for-profit islands and silos.
“We can’t even do something so trivial as share calendar information as a way to manage medical appointments. This may sound silly but when the idea of keeping a checklist is seen as a big idea with major impact the idea that we can save the world by cashing in on a trend is problematic.”

“he evidence suggests that doctors understand healthcare in terms of delivering poor outcomes at a price that’s killing our economy, which is the real determinant of health – every dollar that the healthcare system takes out of someone’s wages or cost structure is a dollar not spent buying decent food or givng someone a job or a raise that can raise their overall well-being.
“The existing system arguably can’t be fixed – if we knew how to do that, we already would have. (That may risk making as the same kind of fact-free assertion as the one about the centraility of the doctor-patient relationship, but what the hey.) My personal opinion – and it’s only an opinion – is that we’re going to build a new one in its place. What we in Silicon Valley do understand is how to disrupt.
“My point is that growing a new health system (notice I didn’t say healthcare) rquires partnership between clinicians, patients, families, payers, policy makers – and technologists in Silicon Valley who can enable this new and better system. My dad was trained as a cardiovascular surgeon, who are widely known (again I don’t have data to support this) as having delusions of god-hood). Of course, we in Silicon Valley collectively might have our own delusions of god-hood. That said, to get us as a society somewhere, would suggest you re-examine yours.”

“Much of what is labeled “innovation” is simply something that is ‘cool.’ Real innovation is as much about commercialization as it is about the invention. Marketing beats technology. My sense is that VC’s see a lot of cool inventions, but are looking for the discipline it takes to effectively commercialize an idea. This is particularly challenging in healthcare because there are so any stakeholders that influence the consumer/patient’s decisions. And our priorities and behavior change radically as I move from consumer to patient.

You may have heard that I’ve been a little harsh on the Silicon Valley crowd this week. Well, I’d like you to know that healthcare isn’t the only place where people are being sold unicorns and rainbows. This still could apply to just about any industry reliant on technology, so, pretty much any industry.

Besides, we all could use a little laugh for a Friday, no? (Yeah, the time stamp says it’s still Thursday, but the server is in Las Vegas. It’s already Friday here in Chicago. Chances are you won’t read this until Friday anyway. Happy weekend!)

P.S., I love Xtranormal. FWIW, I see the company is not based in Silicon Valley, or even the United States. It’s from Montreal.

Free Healthcare IT Newsletter Want to receive the latest news on EMR, Meaningful Use,
ARRA and Healthcare IT sent straight to your email? Get all the latest Health IT updates from Neil Versel for FREE!

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